Vestjysk Bank Jumps on Bets Against Bankruptcy: Copenhagen Mover

Jan. 23 (Bloomberg) -- Vestjysk Bank A/S, the regional bank
that may ask the Danish government to take a stake, jumped the
most in more than two decades in Copenhagen trading after a
local investment newsletter said it was a good buy.

Vestjysk Bank advanced as much as 34 percent, the most
since at least October 1989, making it today’s biggest mover on
Copenhagen’s stock exchange. The shares gained 4.80 kroner to
19.10 kroner, giving the Lemvig, Denmark-based lender a market
value of 239 million kroner ($41.9 million).

The bank is a “super attractive lottery ticket,”
AktieUgebrevet, a weekly newsletter for private investors, wrote
in this week’s edition published today. The low share price
reflects a “bankruptcy-like scenario,” which the newsletter
said was “unlikely.”

Vestjysk Bank said Jan. 19 it may convert some state-held
hybrid capital to shares. The lender needs to refinance about
$1.38 billion kroner in state-backed bonds by 2014 and was told
by financial regulators in December to write down 550 million
kroner more in loans. The bank’s shares hit a two-decade low on
Jan. 10 after local media reported it failed to get support from
Denmark’s biggest banks for a 500 million-krone share issue.

The bank is “not in a deep crisis,” Vestjysk Bank Chief
Executive Officer Frank Kristensen said earlier this month. “We
are not even close to going bankrupt or anything like that.”